The Kenosha telegraph. [volume] (Kenosha, Wis.) 1860-1888, 1887-06-17
A COLLAPSED CORNER.
The Bottom Falls Out Of the Big
Wheat Deal in Chicago.
4 Panic Caused by Break of Eighteen
and One- Half Cents Per lsushel-Several
Large Observation-Disclosures Dealers
Caught-The Effect Elsewhere.
WILD SCENES ON THE CHICAGO BOARD.


Board of Trade has ever seen. The power
full wheat clique which has mystifed and
perplexed the speculative world for over
three months collapsed and left its princi-
pals bankrupt Two old and we'll known
commission firms were carried down with
the wreck and dozens of others are left
tottering on the verge of ruin.
The failure of Peter McGeoch and the
collapse of the lard corner, which occurred
just four years ago to-day, was not cir
cumstance in it's effects to the collapse of
yesterday. The McGeoch deal affected only
the provision interest; the present deal af-
fected every body. Never In the history of
speculative trading has deal of such gil
gantic proportions been engineered so long
and systematically, and with such secrecy.
Though the deal has covered a period of
three months, probably not over a dozen
people, possibly not over half a dozen,
knew the principals.
The orders came from Cincinnati to c. ].
Kershaw, and were signed "W THAT is
as much as the trade knew, and even that
much was not known until the deal had
been under way for several weeks.
The clique bought May wheat stead
lily from the time the deal was
started up to the expiration Of that op-
ton, at which time their trades were
changed into june They readily took and
paid Tor all of the May wheat delivered to
them, and evidently intended to do the
same with June. The action of the Board
of Trade directors in declaring regular
large additional storage capacity was
something which they had not calculated
on and for which they were evidently not
prepared.
ba,1 re- Iyoox hot ho dfroo%nfc
of the board favored giving the trade re-
lief by making additional storage-room
regular, the powerful bears who have
grown rich on three years of declining
markets started in to try the cliques en-
durance. Wheat was shipped from every
available point, and the side-tracks
of all of the roads in this city are now
full of wheat brought in for that purpose.
| The bears sold against this wheat in the
open market and the clique were the buy
ers. Prices steadily crept up and became
| further inducement to farmers to market
| their product. At the time the collapse
came June wheat was worth so cents; by
| the time the collapse was an assured
| fact the same month was selling at
| 1874 cents, and sales were made in the pit
at still lower figure in the excitement OF
| yesterday, though none were officially re-
| ported at less than 1917 cents. The drop in
| the June option was 1917 cents. The neces-
sary expense of handling the large re-
ceipts of wheat was too much for even the
| long purse Of the clique, and they were
| forced to the wall
| The trades of Maurice Rosenfeld & Co.
were officially ordered closed out by the
secretary of the Board of Trade at noon
| yesterday, but long before the announce
ment was made the crowd were practical
| ly assured that the clique had gone to
pieces. A secret meeting was held at the
Hotel Richelieu Monday night between
Joseph Wiltshire, of Cincinnati, we'll
known banker, who is said to have furn-
ished the money in the great corner, and his
| brokers, G. j. Kershaw, Frank Johnson.
of Rosenfeld & Co., and Irwin, Green &
| Co., and Wiltshire departed, after prom
| ising his Chicago operators that mora
money would be deposited to their
order upon his arrival in Cincinnati Up
tothe close of 'change yesterday Wilt
shire had failed to keep his promise, and
Resented Il Go. became tired Of waiting,
| and at noon ordered their trades closed
out. Kershaw was more sanguine and, al
though he admitted that the funds had not
arrived, still asked that his trades be kept
| open until this morning 1t is said that he
expects money from sources independent
of the clique, and in that case his failure
to-day will be averted.
1t was pretty we'll understood among a
few of the big bears on 'change that the
| Monday night interview had not resulted
in any very pleasant conclusions for the
clique, and word went around at the opeu-
ing of the board to raid the market Both
June and July wheat was offered from all
sides of the pit at the start; the former
broke cents and the latter nearly cents
in the first five minutes.
The first bid made for May wheat
was 81 CENTS and six minutes later wheat
dropped to 70 cents, difference of AZ
cents from the closing price Montay
night. Such a scurrying of brokers and
messengers is seldom seen. They rushed
in and out of the big room hatless and out
of breath, some to unload wheat and
others to get instructions. Within an
| hour millions of bushels We're sold by the
clique.
The brokers supposed to be running the
corner began by bidding 80 cents, while
the opposition were offering wheat at S619
| A few minutes after eleven o'clock Murry
| Nelson approached President Wright and
made application for the marginal price of
June wheat to be fixed. Mr. Wright re-
piled that the matter would be con-
sidered at meeting to be held later.
While the above conversation was going
on the alleged clique brokers were selling
July wheat against the cash wheat they
had been carrying. The excitement in
creased as the hands on the Indicator ad-
vanced to 1871 and then dropped to Is A
minute later the hands pointed to
7sl, a drop of six cents, and
the shorts were wild. All sorts of
extravagant bids were made, but very
few were accepted. The bids fuc-
tuated between 7715c and nc until the bi g
bell on the tower struck twelve, then the
! indicator showed that sale had been
made at 769c, when the crowd was wild.
| The entire board was little less than a
| pandemonium and the bears de-
clared it just retribution on
| the bullish wheat manipulators. At
+, 1890 came the startling announce
ment that all persons having trades with
Rosenfeld & Co., one of the clique houses
should close them at once. The uproar
| had not subsidized when July wheat took
the fourth and worst turn of the day and
dropped for moment to "a cents.
At Rosenfeld's Office ManagerFrankJoh ohm
| son was in charge, and said the clique had
/ violated all of lis verbal, written and tel
egraphic promises to put up more margins.
/ When it was found that the money had
not been deposited it was decided that in
order to treat all alike and find out where
they stood they had better order the trades
closed out, so the announcement was &C
cordingly made. Continuing he said
I'VE have paid for $4,000, 600 bushels of wheat,
but the attitude of the directors of the board in
declaring every inch of available storage-rcom
IN the city regular, made it appear that
| in time we would be compelled to
take and pay for almost the entire
crop. There was talk on the board
to-day that several more warehouses would be
| made regular, ana it was even the intention to
turn the Exposition building into warehouse
| if necessary. We were afraid to take any more
wheat. but we will pay dollar for dollar on all
! our debts"
During the afternoon session it was Off
cially announced that e. w. Bailey & Co.
! and Hamill & Brine requested all parties
| having trades with them to close them
out at once. The instant this announce
ment was made July wheat dropped to
7311z, but soon recovered and went back
| to "a.